A joint venture between Index Real Estate Investments and Ketter Construction has received $22.3 million in financing to develop a 51-unit workforce community in the Koreatown district of Los Angeles.

George Smith Partners arranged the loan, which was structured as an A/B execution with a senior lender that was willing to advance up to 75 percent of cost subject to a 65 percent valuation upon stabilization. The team layered on a $5 million mezzanine tranche and negotiated a partial deferral of the development fee to round out the capital stack. The $17.3 million senior loan was priced at LIBOR plus 375 and a half-point for the 36-month term. The $5 million tranche was priced at 12.3 percent annual.

Situated at 3057 W. Pico Blvd., the community will be near Interstate 10, within 5 miles of downtown. Additionally, the location is close to employment centers and offers various shopping and entertainment options. The new development will also be positioned near Western/Pico bus stops. The property is already under construction and will feature 3,350 square feet of retail space and other on-site amenities, such as an open community space and fitness center.

“This is a prime location in a dense urban area with a tremendous need for housing,” said Pablo Kupersmid, principal of Index Real Estate, in prepared remarks.“We are taking a thoughtful approach to ensure the development is well-aligned with the needs of the local market. For that reason, this will not be a luxury product. Rather, the property will provide quality housing with on-site amenities, including ground-floor retail, an open community space and a fitness center, without over-amenitizing—making it a perfect fit for workers in the region.”